Key takeaways

• Play to earn peaked with Axie Infinity, which reached 2.7 million daily players and $1.3 billion in revenue in 2021, largely from players in the Philippines earning its SLP token as income.

• Axie's economy depended on new players paying in, so when growth stopped its SLP token fell 99.8% from its peak and daily players dropped about 90%.

• StepN and the wider play to earn sector followed the same curve, which shows that paying users buys activity only for as long as the payments keep growing.

For about a year, the most successful play to earn game in crypto was really a job. Axie Infinity, a game where cartoon creatures battle each other, reached 2.7 million daily players at its 2021 peak, but most of them weren't really playing, they were working. Analysts at the time estimated around 55% of players were in the Philippines, where grinding the game's SLP token often paid better than local jobs, and people formed "scholarship" groups that lent starter teams to new workers for a cut of their earnings. The money was enormous, with $364 million in revenue in August 2021 alone and $1.3 billion across the year.

But look at where that revenue came from, and the machine explains its own ending. Most of it was breeding fees, paid by existing players creating new creatures to sell to new players. In other words, today's workers were being paid by tomorrow's workers' entry fees, and that kind of economy has one requirement, which is that it must keep growing.

The moment new players stopped arriving, everything ran backwards. The wage token collapsed, eventually falling 99.8% from its peak, and the workforce did what any workforce does when the pay stops and quit. Daily players fell about 90% from the peak, with a $624 million hack of the game's bridge speeding up an exit that was already underway.

When the reward is the product, every user is an employee, and employees quit when the pay stops.

What is play to earn in crypto?

Play to earn is a crypto game model where players earn tokens or NFTs for playing, and those rewards can be sold for real money. In games like Axie Infinity, players bought starter assets, earned a reward token through daily play, and sold it on exchanges, so the game worked more like paid work than entertainment.

The model spread fast because it solved a real problem for a lot of people during 2021. In countries where the token paid more than local wages, the game became a source of income, and the scholarship groups turned it into something close to a staffing agency, with managers owning the assets and players doing the grinding. That's why Axie's player base looked more like a labor market than a gaming community, and why it behaved like one when the pay changed.

Why did play to earn fail?

Play to earn failed because the rewards were paid out of new players' money rather than from people who wanted to play. As long as new players kept buying in, earnings looked real. When growth slowed, the reward token lost value, earnings fell, players left, and the falling player count pushed the token down further.

If Axie were one badly designed economy, it would just be a story. The copies show it's closer to a law. StepN paid people to walk and ran the same curve at the same speed, going from over 700,000 monthly users at its May 2022 peak to about 46,000 nine months later, a 94% collapse. The whole genre followed, and by 2025 quarterly investment in crypto gaming had fallen to $73 million, the sector's market value had dropped by more than two-thirds, and the standard retention stat was 60% of players gone within 30 days.

Academic research adds the precise version. A study of Axie player behavior found that money rewards do keep players around, but the effect weakens over time and is best described as temporary. Paying users works, genuinely and briefly, at a cost that keeps rising, and the effect fades exactly when you need it most.

Why play to earn matters far beyond gaming

Play to earn is the extreme version of a pattern that runs through most crypto growth tactics. Points programs pay in promises, liquidity mining pays in token emissions, tap-to-earn pays in airdrops, and play to earn paid something close to a salary. The costume changes but the physics don't, because a payment can attract users faster than any product improvement, and it holds them only as long as the payments keep growing. Once your growth depends on paying people, your retention has a payroll, and payrolls get more expensive while novelty wears off.

What makes the gaming version so valuable is that it found the ceiling. Axie wasn't a small test but a national labor phenomenon with a billion-dollar income statement. If paying users could ever replace wanting the product, it would have worked there, and it didn't, which settles the question at every smaller scale too.

What we'd tell a founder about play to earn incentives

Use payment to fund discovery, never routine. A reward that gets someone to try your product once is acquisition spend with a clear purpose. A reward that pays them to keep doing the same thing every day is a wage, and once you pay wages you're an employer competing with every other wage your user could earn, so know which type every incentive in your product is.

Find your zero-subsidy floor before you scale. Somewhere in your data is the group of users who act as if the rewards didn't exist, using the product because they want to. The size of that group is your actual business and everything above it is payroll, so an honest growth plan grows the floor rather than the payroll.

Watch the direction of the money, not the volume. Axie's dashboards looked incredible while every dollar of "revenue" was new players' entry money funding old players' exits. Ask whether the current user's experience would still work if new users stopped arriving tomorrow, and if the answer is no, your growth chart is measuring a fuse. The same test applies to any airdrop marketing strategy.

If you're building a game, make the game the reward. The studios still standing moved to fun-first design for the oldest reason in entertainment, which is that fun is the only retention tool with no ongoing cost. It's also the one a competitor can't steal by offering a higher wage, because it isn't a wage.

Someone was always going to run this experiment and pay people real money, at massive scale, to use a product. Crypto ran it with millions of workers and billions of dollars, and it bought the industry a clear answer, which is that payment rents behavior while products earn it. Every incentive budget written since is either spending with that result in mind or paying to learn it again, and the fix starts with crypto user retention that doesn't depend on a reward.

Frequently asked questions

What was Axie Infinity?

Axie Infinity is a blockchain game where players collect, breed and battle cartoon creatures called Axies, which are NFTs. It became the biggest play to earn game of 2021, reaching 2.7 million daily players and $1.3 billion in revenue, with about 55% of players estimated to be in the Philippines.

Why did Axie Infinity's player count collapse?

Axie's rewards were funded by new players buying in, mostly through breeding fees. When new players stopped arriving, its SLP reward token fell, eventually 99.8% from its peak, so earnings disappeared and players left. Daily players fell about 90%, and a $624 million hack of its Ronin bridge in March 2022 sped up the decline.

Can you still earn money playing crypto games?

Some games still pay rewards, but far less than at the 2021 peak and with far less investment behind them. By 2025, quarterly investment in crypto gaming had fallen to $73 million, and around 60% of players left within 30 days. Treat any game that promises steady income with suspicion, because that income usually depends on new players.

Are play to earn crypto games dead?

The pure play to earn model, where rewards are the main reason to play, has largely collapsed. StepN lost 94% of its monthly users within nine months of its 2022 peak, and the sector's market value fell by more than two-thirds. The studios still building have shifted to games that are fun first, with tokens as an extra.

What is the difference between play to earn and play and earn?

Play to earn treats earning as the reason to play, so players behave like workers and leave when pay falls. Play and earn treats the game as the product and rewards as a bonus. Research on Axie found money rewards keep players only temporarily, which is why studios moved toward the second model.